Too Big to Fail, which premieres on HBO on May 23, 2011, features a star studded cast recounting the events that led to the financial crisis and bailouts by the U.S. government in 2008. It is a mini-series packed into a 98-minute made-for-television movie where several essential characters are quickly introduced and where finance and economics are casually discussed. It may help if one has a baseline of knowledge about the crisis before watching the movie. If one doesn’t know who Henry Paulson, Ben Bernanke, and Timothy Geithner are or what Lehman Brothers, Goldman Sachs, and AIG are, it may prove slightly difficult to follow.

Although the Director, Curtis Hanson (L.A. Confidential, 8 Mile), was limited to telling a very long and complicated story in a very short amount of time, he was able to skillfully pull it off. Perhaps this is because the screenwriter, Peter Gould (Breaking Bad), deftly adapted Andrew Ross Sorkin’s 2009 prize winning New York Times Bestseller, Too Big to Fail.

The cast was right out of a Robert Altman film, there was a large number of well known actors including William Hurt (Paulson – Sec. Treasury), James Woods (Fuld – Lehman Bros), Paul Giamatti (Bernanke – Chair, Federal Reserve), Bill Pullman (Dimon – JPMorgan Chase), Ed Asner (Buffet – Berkshire Hathaway), Billy Crudup (Geithner – President, Federal Reserve), Matthew Modine (Thain – CIT Group), Tony Shalhoub (Mack – Morgan Stanley), Topher Grace (Wilkinson), Cynthia Nixon (Davis), and many others. They all looked and played their parts very well with the exception that there seemed to be no effort made toward sounding like the people they played. It was difficult to get past the notable voices of the actors. Paul Giamatti sounds like Paul Giamatti and nothing like Ben Bernanke. Hurt sounded nothing like Paulson. Crudup nothing like Geithner. Perfection wasn’t necessary, but it seemed as though there was little to no effort made at all by the actors to at least sound a little more like the real people they were portraying and less like themselves.

The story opens on a  shot of Ronald Reagan. It is news footage of a speech he gives on deregulation. Credits play as we see an image of Clinton signing a piece of legislation as the audio of newsmakers make mention that this is Congress’ bill being singed. Alan Greenspan is seen and states, “Don’t regulate for regulation’s sake,” which is followed by Bush proclaiming everyone should live out the American dream and own their own home. Miscellaneous clips talks of high profits and subprime loans, and then mortgage meltdown and government bailout.

At this point, I am thinking this film is going to be about blame… and that blame is going to be deregulation ushered in by Reagan, the Republican Congress during the Clinton years, Bush 43, and Reagan through Bush’s Federal Reserve appointee, Alan Greenspan.

This prompts me to check the cast and crew to see who they support and if they are bringing their agenda to this story in their hopes to rewrite history and put Republicans in a negative light and Democrats in a positive light before the election in 2012. And, of course, the Director and the Writer are both ardent Obama supporters. All those at HBO support Obama like Co-President Eric Kessler, Co-President Richard Plepler, President of HBO entertainment Sue Naegle, President of HBO Films Len Amato and Executive Producers Paula Weinstein, Carol Fenelon, and Ezra Swerdlow. Even the Cinematographer Kramer Morgenthau and Casting Director Alexa Fogel have contributed to Obama’s 2008 campaign. And the Obama supporting list of actors is long too: Topher Grace, William Hurt, Matthew Modine, Cynthia Nixon, and Amy Carlson. As if that’s not enough, there are many other ardent left-wingers like Paul Giamatti, Bill Pullman, Tony Shalhoub, and Ed Asner.

Then the story opens on James Woods playing Dick Fuld, Chairman and CEO of Lehman Brothers… an ardent Democrat and Obama supporter. James Woods stands out as the political maverick in the cast. In a recent interview with New York Magazine, Woods is quoted as saying, “I’ve always said that the next Obama slogan should be, ‘Barack Obama: Putting America Out of Business,’ because that’s what he’s doing.” So I decided to turn off my bias filter and give this story a chance.

As the story unfolded, I saw that the villains in this film weren’t the Republicans, rather it was a single villain… the total and complete financial collapse of our nation, or as Bernanke puts it, “[replaying] the depression of the 1930s. Only this time… far, far worse.” So, regardless of any one American’s political affiliation watching this film, total and complete financial collapse is an enemy we can all collectively desire to defeat.

The heroes, however, that’s a little more complicated. The actual heroes of the story are Republicans Henry Paulson (Secretary of the Treasury), Ben Bernanke (Chairman of the Board of Governors of the Federal Reserve), and Independent Timothy Geithner (President of the Federal Reserve Bank of New York). They artfully maneuver their way through the minefield of economic collapse. Bear Stearns has already collapsed, Lehman Brothers is on the brink, Merrill Lynch next, and with all this going on, AIG – the safety net for all these creditors – was in the process of imploding from its own lack of liquidity and inability to meet its obligations. If AIG falls, all the banks fall. People would pull their money out of their banks and there would be no George Bailey (Jimmy Stewart) trying to stop the “run on the bank” by convincing his depositors to take only what they need from his honeymoon stash. America, as we know it, would be in ruins.

Every maneuver in their quest to stabilize the markets is met with unpredictable reactions. Once they believe they’ve averted disaster, the pundits, investors, and citizens react differently than expected. It’s a reminder of Nobel winning economist F.A. Hayek’s precept that, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

But in the end, as we all know, it was capital injections in the form of a Troubled Asset Relied Plan (TARP) that would “save the day.” In short, the plan would see the U.S. government purchase assets and equity from all financial institutions, even if they didn’t need it, in order to stabilize and strengthen the financial sector. As Bernanke put it, the upside would be stabilizing banks faster, the downside would be nationalizing a few banks. Their plan to soften the blow was that they would force private banks to participate in this plan under law, but that the government would not have a voting interest or the ability to tell the banks how they use the money injected into their coffers… leaving the question to the viewer, “They will lend it out, won’t they?”

But, was TARP the right solution? If one believes it was, then the heroes of this story are without a doubt Republicans Paulson and Bernanke. But, if one believes it wasn’t the right solution, then the Republicans are just kicking the can down the road. Regardless, the story is a quest for a private solution, according to Paulson.

As Republican public relations guru Jim Wilkson (Topher Grace) says at one point, “You just can’t hand the banks massive piles of cash. Nobody’s going to go for it. To the Republicans, it’s nationalization. To the Democrats, it’s a bailout. And the banks are going to go ballistic.”

The story is well crafted and builds suspense out of the unexciting topics of finance and economics. There were parts that bothered me, like making the Republican Chairman of the Securities and Exchange Commission, Christopher Cox, look like an immature boob, or Republican presidential candidate Senator McCain look like he is clueless on economic matters contrasted by Senator Obama’s grip on the subject, or simplistically blaming deregulation while omitting the fault of Carter’s Community Reinvestment Act of 1977, or that derivatives and subprime loans were born during Clinton’s presidency, or more importantly that in 2006 Republicans pleaded with the Democratically-controlled Congress to begin taking measures by pulling the reigns back on Fannie and Freddie to mitigate the impending economic disaster.

Those criticisms, however, were offset by so many of the lines delivered by Topher Grace’s character, Jim Wilkson, who best resembled the attitudes and feelings of most Americans during this time. At one point, it is suggested that the government purchases up the toxic assets of the banks, to which he responds, “Ohhh, call it cash for trash,” he also calls nationalization “the N-word” and that it is un-American, and he suggests that the government running the banks would be like the government running the Post Office, which they “run like a dream.” Another character addresses the issue that the government having the ability to dictate compensation would be the biggest “brain drain this country has ever seen.” And House Speaker Nancy Pelosi is characterized as something like the head of the Mafia. Her character comes across as an elitist snob, which I particularly enjoyed.

The movie was a surprise. Although it wasn’t 100 percent balanced, it was enough for this right-winger to actually enjoy it. And the filmmakers did a pretty decent job packing in a lot of characters and a lot of story into a short amount of time. If Obama-loving HBO can pull off the upcoming Sarah Palin story, Game Change, and the Dick Cheney movie, Angler, with the same deftness and fairness, I will be pleasantly surprised.  Better yet… I will be astonished.

The program is just what one would expect from PBS: earnest, well-researched, skillfully presented, and eager to lick the boots of government while criticizing individual freedom for everything wrong in the world.

There are two important lessons to be learned from the Great Depression, in my view:

1. The government causes business cycles and downturns through its erratic, manipulative policies intended to benefit powerful voting blocs at the expense of those less able to fight back. The market works when left alone, and government interference should be limited to redressing actual harms done by one party to another. This includes combating fraud, enforcing valid contracts, and setting clear but liberal guidelines for transactions made across political borders. And nothing more.
2. The Great Depression brought on a cultural conservatism and moral regeneration of the American people. This is an aspect of the era which few people seem to understand. It was in the early ’30s, for example, that the movie industry was finally badgered into imposing a Production Code ensuring all widely distributed films would conform to a set of standard plot-lines, language restrictions, and limits on visual sensationalism (a move which undoubtedly had salubrious results but was probably unnecessary given the change of public taste in a more conservative direction; in addition, the movie studios engaged in it voluntarily, even if under the threat of state regulation; thus the Code was surely less drastic, damaging, arbitrary, and politically controlled than it would have been if imposed by government). During the 1930s the American people revolted against what they saw as the social and cultural excesses of the 1920s just as strongly as they did against what they saw as the economic excesses of the time. Earnestness and attention to the political, economic, and moral implications of human action were on the rise in all media. Breaking economic and political corruption was a major concern of the American culture.

The Great Depression was widely seen at the time as a punishment for the economic, social, and moral changes of the 1920s, when the nation had moved in a more classical-liberal direction affording greater economic, social, and personal freedom. The Roaring ’20s were seen in retrospect as a time of excessive license in all things (which they indeed were in some cases), and the Depression was viewed as an understandable payment that had to be made–the hangover after the party.

Thus the nation decided to swear off the booze of individual liberty altogether. As a cure, the people turned to government control of the economy and tighter moral strictures against individual freedom. If this sounds like today’s regnant political agenda, that’s because the two are indeed identical in means, motive, and opportunity. And they are both criminal in their stupidity.

I believe that both the moral reaction and economic impositions of the Depression era were overwrought and unnecessary, but the moral reaction was the more justifiable of the two because it largely avoided using government force for its implementation. As a result of its relatively voluntary, organic nature, the moral response to the Roaring ’20s managed to do some good, as noted above, while refraining from doing much harm.

Of the economic puritanism of the time, the very opposite was true. That is the way of government action.

Given PBS’s track record as a die-hard advocate of a statist, progressive agenda, it should surprise no one that the American Experience series refuses to incorporate liberal notions such as these, choosing instead to smother the truth in a miasma of irrelevant moralization.

Right at the beginning of episode 1, “The Crash of 1929,” the narrator refers to “the promise and the illusion of the 1920s,” setting the moralistic tone of the episode. Immediately thereafter, the noted statist economist the late John Kenneth Galbraith is shown saying, “Let us not think for a moment the illusion, the aberration of the 1920s is unique. It is intimately a part of the American character.”

In other words, people will go mad if not constrained by a gigantic, all-powerful benevolent government. We are undoubtedly supposed to be grateful for the warning.

Immediately thereafter, two commentators criticize the lovely Irving Berlin song “Blue Skies” as emblematic of the 1920s “illusion” that freedom was a good thing. The machinations of stock market manipulators in the decade are limned in some detail, and the commentators explicitly condemn the lack of government regulation.

What they do not note is that fraud of the sort described in this part of the program is illegal now and was illegal then. Thus while the perpetrators of such actions were morally responsible for their wrongs, from a social perspective the real culprit behind such market manipulation was in fact the government, in failing to perform its basic function of preventing fraud, enforcing valid contracts, and otherwise preventing people from harming one another.

Indeed, a commentator in the program explicitly states that such manipulation was legal at the time, which is quite wrong and would be deceptive even if true. Yes, it was the case that there were no specific laws explicitly criminalizing a variety of particular manipulative actions in the stock market, but those acts were fraud and could have–and should have–been prosecuted under existing laws. In addition, the failure to have laws preventing such fraud would be a failure of government criminal law, not of economic policy.

Economic regulation, however, is the agenda here, and every possible means is used to argue for it. The episode briefly criticizes New York Mayor Jimmy Walker for his fiscal imprudence, but the moment is conveyed as a critique of 1920s excessive exuberance and liberality, not as a matter of government corruption and a failure of government to do its duties.

Similarly, the role of the Fed in the 1920s bubble (which it fed by debauching the currency) and in the subsequent Depression (which it created and prolonged by tightening the currency far too much and excessively interfering in the markets, thus preventing the needed corrections from occurring) is alluded to but presented in moralistic terms, as another example of excessive liberality followed by a painful but necessary corrective action.

Individual investors are likewise presented in moralistic terms, depicted as greedily and foolishly chasing after “the one lucky break,” as one person puts it. One is given no understanding of how the investors’ actions could in fact have seemed at the time to be rational, not speculative. The reality is that, then as now, an individual must look at the possible returns and risks involved in investing one’s money and also in not doing so. If the government reduces apparent risk to zero–as the Fed did during the 1920s and 2000s–what on earth does one think investors will do but continue to invest in a wide variety of ventures based on increasingly risky foundations?

This is what happens in all bubbles, and it is what happened in the most recent one, but American Experience refuses to acknowledge this critical fact. Thus here too a failure of government is elided and its effects blamed on the allegedly free choices of individuals in an allegedly under-regulated market.

Tellingly, as the program describes the stock market crash of 1929 and the events that led up to it, nothing about Fed policy or the money supply is mentioned. Yet the Nobel Prize-winning economist Milton Friedman has convincingly argued that the manipulation of the money supply caused both the bubble and the bust. That particular truth, however, does not contribute to and in fact contradicts the program’s agenda for government power and against individual liberty. Thus it, too, is redacted from the story.

Near the end of the episode, Galbraith blames it all explicitly on the investors–the “suckers” as he crudely and callously calls them–and says that such crashes happen every twenty or thirty years because that’s how long it takes for the “suckers” to forget that their earlier greed and foolhardiness led to disaster. The alternative explanation–and the true one–is not given any attention: that every twenty or thirty years the government’s renewed manipulation of the economy as a means of buying votes results in disaster.

The program concludes with an argument that what the stock market crash taught Americans was a great lesson in humility. Certainly that was the lesson that the American people took from it. The real lesson, however, is that governments’ attempts to manipulate the economy always bring catastrophic consequences in time.

Of course it’s true that many people did many bad things both in the stock market and in other areas of human endeavor in the 1920s. But that’s always the case, human beings being what we are. What was different about the 1920s and ’30s was the choices government made, and the consequences were world-changing.

The real moral failure to be found in American Experience: The 1930s is in many people’s continual refusal to recognize that freedom of choice is a good, and coercion an evil, regardless of who is doing which.

I thought I’d take the opportunity I have through Big Hollywood to ask about a documentary I’ve recently seen. I consider myself fortunate to have been introduced to this site and all the intelligent, well informed, talented and humorous individuals it has attracted, so what better place than here for some answers, maybe more questions, or just some plain old feedback/dialogue.

Has anyone seen or heard about the 2005 documentary, “America: Freedom to Fascism” by award winning film maker Aaron Russo?

Outside of this documentary, I know very little about Russo or the other conspiracies that stem from his research into the personal income tax and control of government by private banks (like the World Trade Center bombings), so I’m not going there. I’ve never been much on conspiracies, but this is a very well done, professional and seemingly factual account of the birth of the Federal Reserve and the subsequent and permanent taxing of the income of the American people as a result. It at least (maybe) answered a two-part question I’ve had for years, that being, what is this national debt we owe and who are we indebted to? It never made sense that we, the citizens of the United States, were in debt to our own government. In other words, how is it that we are in debt to ourselves? The vast majority of us have always paid the countless taxes we’re asked to, so how do we owe more than that?

If Mr. Russo is correct, our national debt is the result of borrowing money from a private bank, not a government institution, known as the Federal Reserve. The Federal Reserve came into being in 1913 while much of Congress was out during the Christmas holidays and therefore did not get the opportunity to vote on it. In one night, this skeletal crew of Congressmen, “bribed” by powerful bankers, passed the Federal Reserve Act and gave this newly formed institution the authority to print all of our money, lend money to our government, charge us (taxpayers) for the privilege and then, on top of that, charge us interest.

President Woodrow Wilson signed The Federal Reserve Act into law in 1919 and said:

“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit. We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.”

Mr. Russo’s film raises many other questions, among them:

There’s the question about why our government needs a private institution printing our own money to begin with, when Congress was given the authority to do just that in the first place and at no cost to the American people.

There’s the question of whether the Federal Reserve is actually legal to begin with.

There’s the question about whether this private banking institution, controlled by who knows who, has taken control of all our country’s gold reserves as collateral for the debt on the money they have “lent” us.

Mr. Russo raises many more questions, but the biggest question of all is why are all of us hard-working Americans allowing our wages to be taxed, when apparently, no such law exists? Where are our representatives while every penny from the personal income tax collected goes to a private bank and not one cent to infrastructure, education, defense or anything else that would benefit We The People? Apparently, it all goes to the interest we owe these unknown debtors and we’re not even making a dent on the debt!

According to the film, no one knows who these people or these banks are. There’s no auditing and therefore no accountability. They have the power to enforce the law as they see fit through the strong-arm tactics of their own police force — the I.R.S. — who are also not accountable to anyone, hence, the fear. These people can literally come to your home and/or business at anytime, take your possessions, arrest and take you away with the help of the local police, on the smallest pretense (no proof needed) and ruin your life. If you can afford it, you’re left having to make sense of it all through the costly legal resources needed to prove your innocence. When people do prove themselves innocent, not only do they not get reimbursed and made whole, they don’t get so much as an, “Oops…sorry ‘bout that.” 

The politicians and media seem to be in lock step with these people, which means they give them a free pass and any victory against them by private citizens are suppressed. And when I say “politicians,” according to the documentary, both parties are equally at fault for turning a blind eye. No party holds any moral high ground.

If this documentary has any validity, if even one of the major questions it raises cannot be honestly answered, then both the Democrat and Republican parties are responsible for allowing this to continue.

However, listen to the difference between these two quotes (separated by eight years, one president and two ideologies) on this subject:

“I believe that in both spirit and substance, our tax system has come to be un-American. Death and taxes may be inevitable, but unjust taxes are not.” — President Ronald Reagan March 28, 1985

“We cannot be so fixated on our desire to preserve the rights of ordinary Americans.” — President Bill Clinton March 11, 1993

Mr. Russo also raises questions about our open borders — how Americans may soon need a National I.D. card to travel from state to state, I.D. chips on everything to track our every move, globalization, a one world currency — and more.

Some of this would have sounded like science fiction just a short while ago, but as our current president meets with the other leaders in Europe for the G20 Summit, one of the biggest topics is a new world currency — which China and Russia are pressing for. A global currency is needed if there’s going to be a New World Order … Now I’m starting to sound like a conspiracy nut, but I am concerned!

Let’s remember that right now, our government is “lending” America’s biggest companies and financial institutions almost a trillion dollars and they are now, for all practical purposes, running these businesses. They have certainly started to call the shots! Do I need to say what it is when a government runs their countries businesses?

I know what it isn’t! It’s not what the forefathers of this great country had in mind and paid for with their lives, nor is it what our Founding Fathers had in mind when they created the supreme law of the land: “The Constitution of the United States of America.” 

So, go rent this film if you haven’t seen it and for those of you who have, help me out here…got any thoughts on this? Have we already lost our freedom? Is it too late?

Let’s come together, stand strong, fight for our rights and get back to being a free nation.

All artwork by Alvaro Alvillar. http://studioartservices.com